Factsheet | April 26, 2019

California's 0-3 Child Care Crisis

The economic impacts of insufficient child care on parents, employers and taxpayers

ReadyNation commissioned a national survey of working parents of children under age three. This survey is one of very few national surveys covering this group. The survey yielded a nationally representative sample of 812 parents – both mothers and fathers – of children under age three. It provided evidence of the various ways in which parents’ work commitments, performance, and opportunities are diminished by problems with child care. Merging the survey evidence with labor market data, we modeled how the economy is affected by child care problems:

  • Families lose an average of $3,350 per working parent, in lost earnings and in more time looking for work. Across the 11 million parents of children under age three, this burden is $37 billion per year.
  • Businesses lose an average of $1,150 per working parent in reduced revenue and in extra hiring costs. In aggregate, the annual burden on business is $13 billion.
  • Taxpayers lose an average of $630 per working parent in lower income tax and sales tax revenue. In aggregate, this amounts to $7 billion each year.

These costs total to an annual cost of $57 billion in lost earnings, productivity, and revenue nationwide.

California’s Gross Domestic Product represents roughly 16 percent of the nation’s GDP and California’s population represents roughly 12 percent of the nation’s total population. That suggests that the lack of reliable child care for working parents of young children, up to age 3, could come to $6.8 to $9.1 billion in annual costs for California.

California policymakers must expand programs to enhance the affordability and availability of quality child care – particularly for infants and toddlers. Action now can improve the experiences of California children today and strengthen our state in the years to come.

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